What Is A Rent Charge?
Historically land owners placed rent charges onto land to provide a continuing income following the sale of development land for little or no consideration. Some rent charges are payable for an area of land itself and then apportioned between the properties built there on. Payments are usually less than £10 per annum. The person receiving the rent is known as the “rentowner” and has no other legal interest in the land.
Once created, the rent charge will apply to all subsequent owners of the property and bind the property no matter how long it has existed. No new rent charges can be created following the Rent Charges Act 1977 and all relevant rent charges will expire in 2037 after the 60 year shelf life has expired.
The existence of the rent charge in registered land should appear in the charges register at the Land Registry. A more detailed search of the Land Charges Register will be required for unregistered land.
Rent charges should not be confused with ground rent payable for a leasehold property.
Under the Rent Charges Act, you can make an application to the rent owner to redeem your rent charge. This will involve a one off lump sum payment. The other alternative is to contact the Rent Charges Unit in Birkenhead (responsible for all applications for the redemption of rent charges under the Rent Charges Act 1977). It will work out the price for redeeming the rent charge and the owner of the rent charge will be obliged to accept this sum.
A buyers solicitor will ask to see the latest rent charge invoice. If no evidence that the rent charge has been paid can be produced then it is likely an apportionment of rent charge will be taken off the sale price to allow for the buyers to cover any cost of back dated payments being demanded in the future. An apportionment of say 10 years rent charge would be typical.
If you need a Solicitor to help you with a sale or purchase of a property, contact our friendly department today . Our team is one of the largest residential conveyancing departments in Norfolk with offices in Norwich, Wymondham, Lowestoft and Bungay. We can offer you a competitive quote. Call us on 01603 620508 or email us and one of our friendly team will get back to you.
This article was produced on the 13th October 2016 by our Residential Property team for information purposes only and should not be construed or relied upon as specific legal advice.